Byrd Rule nixes two potential revenue raisers. A plan by Senate Republicans to require states to share the cost of the Supplemental Nutrition Assistance Program (SNAP) has been ruled out of bounds by the Senate parliamentarian. POLITICO reports that this development will force Republicans to search for new offsets to fund their $67 billion farm bill priorities. Republican efforts to eliminate funding for the Consumer Financial Protection Bureau (CFPB) and several other financial oversight programs were also struck down by the parliamentarian, The Hill reports.
Is the Budget Act of 1974 broken? TPC’s Howard Gleckman argues yes, and that it’s time to start over. The Congressional Budget and Impoundment Control Act of 1974 may have once helped Congress coordinate tax and spending plans, but it now enables partisan budget gimmicks and rising deficits, TPC’s Howard Gleckman argues. He says that Congress should repeal the law and rebuild the process with greater transparency and discipline. He notes that reconciliation, a key tool of the act, has been used to pass trillions in tax cuts and spending increases without bipartisan support or adequate fiscal oversight.
Treasury prepares for big changes that avoid “messing with the 1040.” Treasury Deputy Secretary Michael Faulkender says teams are preparing to implement provisions of the tax bill under Senate consideration without disrupting IRS Form 1040. Speaking at a Council on Foreign Relations event, he said the IRS is using artificial intelligence and internal workarounds, including new schedules and guidance, to minimize administrative burdens, reports Tax Notes.
Expanded child tax credits could help millions with no significant loss in employment. As Congress debates reforms to the child tax credit (CTC), new TPC analysis suggests that carefully designed expansions could help millions of low-income families and slightly increase overall employment. While critics worry about work disincentives, TPC estimates find those fears are overstated, particularly if reforms include an “enhanced phase-in” that encourages work at all income levels. TPC researchers also examine lower-cost options.
A digitized IRS is not yet a digital IRS. The IRS has made progress in scanning paper returns and improving online services, but TPC’s Barry Johnson warns that true modernization requires more than just digitization. Recent funding cuts and strategic pauses may jeopardize plans to reduce costs, boost compliance, and improve taxpayer service, even as demand for digital access grows.
Wisconsin GOP advances new income tax cuts. The Wisconsin Republicans are pushing a $1.3 billion tax cut package targeting retirees and middle-income earners. The measure would expand the 4.4 percent income tax bracket and create a retirement income exclusion of up to $48,000 for some seniors. But as Tax Notes reports, the package faces skepticism from Democratic Gov. Tony Evers, who vetoed similar cuts last year.
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